MoneyGram to be taken private in $1.8bn deal

BY Richard Summerfield

Private equity firm Madison Dearborn Partners has agreed to take MoneyGram International private in a deal worth $1.8bn.

Madison Dearborn will acquire all outstanding shares of MoneyGram for $11 per share in an all-cash transaction. The purchase price represents a premium of approximately 50 percent to MoneyGram's closing stock price on 14 December 2021, the last trading day prior to media speculation regarding a possible deal.

The transaction, which is expected to close in the fourth quarter of 2022, subject to customary closing conditions and regulatory approval, will see Madison Dearborn refinance MoneyGram’s outstanding debt, which was $799m as of 31 December 2021. Madison Dearborn has secured committed debt financing for the transaction from Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc. and Barclays.

"We are excited to enter into this transaction with MDP, which will deliver immediate and compelling value to shareholders and enable us to accelerate the advancement of our digital growth strategy,” said Alex Holmes, chairman and chief executive of MoneyGram. “This transaction is the culmination of a thorough process by the MoneyGram Board to enhance shareholder value while positioning our business for continued growth and expansion."

“MoneyGram has undergone a rapid transformation over the last several years to expand our digital capabilities and adapt to the evolving needs of our customers,” he continued. “By partnering with MDP and becoming a private company, we will have greater opportunities to innovate and transform MoneyGram to lead the industry in cross-border payment technology and deliver a more expansive set of digital offerings, while leveraging our global platform for new customers and use cases. This transaction provides exciting opportunities for our dedicated MoneyGram team and partners, and I'm incredibly excited about the path ahead.”

“MoneyGram is a leader in cross-border payments with one of the strongest brands and reputations in the industry, and we are excited to partner with Alex and his leadership team as they continue to lead MoneyGram's digital growth strategy,” said Vahe Dombalagian, a managing director at Madison Dearborn. “We are looking forward to applying our substantial experience growing digital businesses and deep payments knowledge to help MoneyGram further strengthen its market-leading cross-border capabilities and enhance its digital platform.”

MoneyGram was almost acquired in 2017 by China’s Ant Financial but the $1.2bn agreement was blocked by the Committee on Foreign Investment in the United States.

News: Buyout firm Madison Dearborn to take MoneyGram private in $1.8 billion deal

Lockheed Martin terminates $4.4bn deal to acquire Aerojet Rocketdyne

BY Fraser Tennant

Blaming efforts by the US Federal Trade Commission (FTC) to block the acquisition, global security and aerospace company Lockheed Martin Corporation has terminated its agreement to buy rocket engine maker Aerojet Rocketdyne Holdings, Inc. in a $4.4bn deal.

The cancellation of the transaction comes three weeks after the FTC announced a lawsuit that sought to block the proposed merger on antitrust grounds – a preliminary injunction that would have put the deal on hold pending an administrative trial in June. 

The regulatory agency stated a concern that the proposed deal would hurt competition in the defence industry by allowing Lockheed to cut other contractors off from vital missile components Aerojet provides, particularly scramjet engines for hypersonic missiles and control systems for missile interceptors.

"Our planned acquisition of Aerojet Rocketdyne would have benefitted the entire industry through greater efficiency, speed and significant cost reductions for the US government," said James Taiclet, chairman, president and chief executive of Lockheed Martin. "However, we determined that in light of the FTC's actions, terminating the transaction is in the best interest of our stakeholders.”

Headquartered in Bethesda, Maryland, Lockheed Martin Corporation is a global security and aerospace company that employs approximately 114,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.

"Moving forward, we will maintain our focus on the most effective use of capital with the highest return on investment, including our ongoing commitment to return value to shareholders,” added Mr Taiclet. “We remain confident in our company's strong foundation and growth potential as several exciting projects enter production.”

In a statement following the termination of the merger agreement, Aerojet said that it is was “poised to deliver substantial value to its shareholders, driven by its continued leadership in key space exploration and defence growth markets, including by advancing hypersonics and strategic, tactical and missile defence systems”.

Headquartered in El Segundo, California, Aerojet Rocketdyne is an innovative technology-based manufacturer of aerospace and defence products and systems, with a real estate segment that includes activities related to the entitlement, sale and leasing of the company’s excess real estate assets.

Mr Taiclet concluded: “We will continue to support the US and its allies through our industry leadership and developing the technologies to ensure effective threat deterrence for decades to come."

News: Lockheed scraps $4.4 billion deal to buy Aerojet amid regulatory roadblocks

Quantum computing leader D-Wave goes public in $1.6bn deal

BY Fraser Tennant

In a combination that will take it public, Canadian Quantum computing business D-Wave Systems Inc. is to merge with special purpose acquisition company (SPAC) DPCM Capital, Inc. in a transaction valued at $1.6bn.

Under the terms of the definitive transaction agreement, the combined company will receive $300m in gross proceeds from DPCM Capital’s trust account, as well as $40m in gross proceeds from a group of strategic and institutional investors participating in the transaction via a committed private investment in public equity (PIPE).

The PIPE is led by new and existing investors, including leading Canadian public sector pension plan manager PSP Investments, NEC Corporation, Goldman Sachs, Yorkville Advisors and Aegis Group Partners.

The transaction is expected to enhance D-Wave’s leadership in commercial quantum computing and accelerate quantum use cases into significant customer segments, including manufacturing, logistics, pharmaceuticals, finance and government.

Upon close of the transaction, shares of D-Wave Quantum Inc., a newly formed parent company of D-Wave and DPCM Capital, are expected to trade on the New York Stock Exchange under the symbol ‘QBTS’.

“This deal marks an inflection point signalling that quantum computing has moved beyond just theory and government-funded research to deliver commercial quantum solutions for business,” said Alan Baratz, chief executive of D-Wave Systems. “D-Wave, along with DPCM Capital and our new and long-term investors, collectively believe that this event represents a moment of practical value creation for customers and for investors.

“We are working with our customers to identify applications with high likelihood of quantum value and to translate those problems to run on the quantum computer and then validate that value,” he continued. “We expect this ‘value creation and validation’ to accelerate as an increasing number of diverse use cases emerge – creating a robust cycle of product delivery, application development and market growth.”

Unanimously approved by the boards of directors of D-Wave Systems and DPCM Capital, the transaction is expected to close in the second quarter of 2022, subject to the satisfaction of customary closing conditions, including approval by the stockholders of DPCM Capital.

Emil Michael, chief executive of DPCM Capital, concluded: “By accelerating the $150bn quantum computing market, we are confident that D-Wave will continue to deliver long-term value to stockholders.”

News: 4 Firms Rep Quantum Computing Biz's $1.6B Go-Public Deal

Spirit Airlines and Frontier agree $2.9bn merger

BY Richard Summerfield

Spirit Airlines and Frontier Group Holdings have agreed a $2.9bn cash-and-stock merger deal, the companies have announced.

The deal has a transaction value of $6.6bn including for the assumption of net debt and operating lease liabilities, the companies said in a statement. Upon completion, Frontier will own a 51.5 percent stake in the combined entity, while the remaining 48.5 percent will be held by Spirit’s shareholders. Spirit investors will receive 1.9126 shares of Frontier plus $2.13 in cash for each share they own, giving Spirit shareholders an implied value of $25.83 per share - a 19 percent premium over the value of Spirit shares at the end of last week, the companies said.

The merger is expected to close in the second half of 2022, subject to satisfaction of customary closing conditions, including completion of the regulatory review process and approval by Spirit stockholders.

“We worked jointly with the Board of Directors and senior management team across both carriers to arrive at a combination of two complementary businesses that together will create America’s most competitive ultra-low fare airline for the benefit of consumers,” said William A. Franke, the chair of Frontier’s board of directors and the managing partner of Indigo Partners, Frontier’s majority shareholder.

“We are thrilled to join forces with Frontier to further democratize air travel,” said Ted Christie, president and chief executive of Spirit. “This transaction is centered around creating an aggressive ultra-low fare competitor to serve our Guests even better, expand career opportunities for our Team Members and increase competitive pressure, resulting in more consumer-friendly fares for the flying public. We look forward to uniting our talented teams to shake up the airline industry while also continuing our commitment to excellent Guest service.”

“This combination is all about growth, opportunities and creating value for everyone – from our Guests to our Team Members to the flying public at large,” said Mac Gardner, chairman of the board of Spirit. “We’re a perfect fit – our businesses share similar values, including our longstanding commitment to affordable travel. At the same time, we have complementary footprints and fleets, including one of the youngest and greenest fleets worldwide. Together, we will be even more competitive for our Guests and our Team Members, and we are confident we can deliver on the benefits of this combination to consumers.”

News: Spirit Airlines, Frontier to merge in $2.9 bln deal

SIG Combibloc to acquire Scholle IPN

BY Richard Summerfield

Swiss packaging company SIG Combibloc has agreed to acquire Scholle IPN, one of the leading innovators of sustainable packaging systems and solutions for liquids, in a deal worth €1.36bn.

The transaction, which has an equity value of €1.05bn, will be funded through 33.75 million SIG shares issued from existing authorised capital and €370m in cash. The existing debt of Scholle IPN will be refinanced once the deal completes. The transaction is expected to close before the end of the third quarter of 2022, subject to customary closing conditions.

 “The acquisition of Scholle IPN cements SIG’s position as a global leader in innovative and sustainable packaging for food and beverages,” said Samuel Sigrist, chief executive of SIG. “It is consistent with our strategy of geographic and category expansion accompanied by share gains in key markets. By delivering clear benefits for customers, consumers, and the environment, we will drive value for shareholders.”

“This combination is compelling for our customers, who will benefit from our capabilities and expertise in the liquid packaging industry,” said Laurens Last, chairman and owner of Scholle IPN. “I am excited about the future of the combined business, and I look forward to our joint innovation, with SIG further developing packaging substrates and solutions that are at the forefront of sustain­ability.”

Ross Bushnell, president and chief executive of Scholle IPN, will continue to lead the legacy Scholle IPN business and will join SIG’s group executive board upon close of the transaction.

“SIG and Scholle IPN are highly complementary businesses in terms of market approach and the importance of sustainability of our products,” said Mr Bushnell. “I believe that the combination of entrepreneurial spirit, nimble market response, and shared R&D capabilities will enable us to accelerate innovations for our customers and cement our collective market leadership in sustainable packaging solutions – particularly across aseptic and mono-material offerings which are key to packaging for the circular economy.”

Once combined, the new company will employ nearly 8000 people in 69 sales and manufacturing sites across the globe. The team will service customers across six continents. Their shared technology and R&D capabilities in renewable paper substrates, film extrusion, injection moulding, and filling equipment are backed by an industry 4.0 manufacturing mindset and a drive to become the world’s leading sustainable packaging partner.

News: SIG Combibloc acquires bag-in-box maker Scholle IPN in $1.53 bln deal